The Truth Real Estate Appraisals
A necessary step in the home buying process in a real estate appraisal. Often people think of an appraisal as a home inspection and are confused about their purpose. Some people think that a low appraisal for their home is the kiss of death. If you are thinking about buying or selling a home you should definitely learn at least a little bit about appraisals. The more you know beforehand, the more prepared you will be when it comes time for this in your Las Vegas real estate transaction.
All home loan approvals are contingent on the results of the appraisal. It is really very simple, no appraisal means you won't get the loan on that house. The appraisal is more than likely going to be necessary seems how very few people can actually buy a home with cash. Establishing the homes current market value is the purpose of an appraisal. The sales price will be based on the market value.
An appraisal protects the lender. Lenders don't want to loan money on a property that is not worth the loan amount. The appraisal must be completed before the lender will approve the loan. The information contained in appraisal is invaluable to the lender. The lender will study the details of the appraisal before reaching a final decision. It makes perfect sense. If they are going to be funding the transaction, they should be aware of the property's value.
More often than not, the lender will choose the appraiser. They might have one in house or they might have a contract with an independent appraiser. If you use your own appraiser, they might be subject to final approval from the lender.
Normally, residential properties are appraised using the comparison approach or the cost approach. For the sales comparison approach, the appraiser compares that property to properties in that area that have sold recently and are similar properties. The cost approach is more appropriate for new construction because it is based on the cost to build the property from the ground up.
The appraisal reports are very detailed. They contain information about the subject property along with comparisons of a few similar properties. There is also an evaluation of the overall house market within the area. The appraiser will then list any issues that they feel might bring down the properties value. The next component is a list of any serious problems like bad roofs or weak foundations.
It is very important to remember that the appraisal is not the same thing as an inspection. The appraiser is not responsible of declaring if your home is in good condition or not, even though they might make notes about the current condition of the property. Their only responsibility is asses the property and determine the current market value of the property. A home inspection is a completely different thing.
Real estate appraisals do not cover any personal property that might be included in the sale of the home. It only includes the land, the home and any improvements that have been made to the land.
Everyone fears the possibility of a low appraisal. It is a very common thing, it usually comes up close to closing of escrow. There are a few things that can be done if this happens to you. The buyer can make a larger down payment to cover the cost. If the buyer can't come up with any more money, then the seller and buyer might be able to negotiate on the price a little bit more. If none of this will work, you can always dispute the appraisal.
What exactly goes into an appraisal? Appraisers are looking at the condition and size of the house, its proximity to good schools, the size of the lot, and any upgrades to the property. Appraisers don't care about dirty dishes in the sink, overflowing laundry baskets, chipped paint, broken windows, and appliances that are out dated or don't work.
Appraisals aren't done by just anyone. Real estate appraisers are professionals that have been through school and are licensed by the state. They have to complete state certification requirements and they must also take continuing education classes.
The author, Roy White, and his wife, Shirley, have been helping people buy and sell Las Vegas real estate for over 28 years. They are also investors. If you have any questions or comments you can call Roy and Shirley toll free at 1-866-374-3444 or e-mail them at CENTURY21WHITE@aol.com
Site Map Site Map Page 2 Site Map Page 3 Site Map Page 4 Site Map Page 5
The Roy and Shirley White Team
CENTURY 21 Aadvantage Gold
5041 N Rainbow Blvd
Las Vegas, NV 89130
Direct Line 702-610-4270
Toll Free 1-866-374-3444
Fax Line 702-309-4483
Each office is independently owned and operated
